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Well, most of us do. But at least 2012 brought us some more democratizing alternatives to financing innovative ideas – those often radical business proposals or community-level projects that can’t seem to get respect from traditional sources of funding.

There’s still much work to do, mind you, but the path forward for so-called social finance tools—falling under the umbrella of “impact investing”—is encouraging and could play a growing role in funding clean energy projects and products.

In Ontario, community bonds are one example of the trend taking hold. Community bonds, according to Grace Yogaretnam at Toronto’s Centre for Social Innovation, are small loans from a non-profit’s network of supporters. The money from these loans can be used to advance a specific social or environmental project that benefits the community. The loans bear interest and the bonds can be structured to be RRSP eligible.

There are several renewable energy projects in this province trying to leverage this new approach to financing, giving true meaning to the term “power by the people.” SolarShare Co-op has been leading the pack, selling what it calls “solar bonds” to help finance 18 solar power projects across southern Ontario – and counting. It’s enough so far to power 90 homes

Members of the co-operative, about 410 at this point, purchase bonds in increments of $1,000, and in return earn 5 per cent annual interest over a five-year term. The money helps the co-op pay off higher-interest bridge financing used to construct the projects. A 20-year power purchase agreement with the province, through the feed-in-tariff (FIT) program, essentially guarantees that money will flow back and interest can be paid out.

This is what I meant earlier when I wrote “democratizing alternatives to financing.” The community bond model allows virtually anyone to buy into renewable energy in this province, and in doing so become participants in the electricity system. It means hundreds, potentially thousands, of people can take the place of a single bank.

In November, SolarShare finally got approval from the Financial Services Commission of Ontario to sell its solar bonds—up to $25,000 worth—to the general public. More than $1 million has already been raised. RRSP-eligibility will come early next year.

Another project featured here before, ZooShare Biogas Co-operative, is applying to the FIT program this week to sell biogas-generated electricity into the grid. The fuel will come from a “digester” built at the Toronto Zoo that will produce biogas from the poop of giraffes, zebras, elephants and other zoo animals that has been mixed together with food waste.

The hope is to start selling community bonds to support that project sometime next spring. (Disclosure: To support these community initiatives, I have signed up to be a member of both SolarShare and ZooShare, and so far own one solar bond.)

Another rising trend around social finance is the growth of crowdfunding. A typical set-up would be a website that allows anyone with an Internet connection and credit card to donate or invest in a specific project or business idea. Popular examples include the sites Kickstarter.com and Indiegogo.com, which both appeal to the philanthropic inclination of the masses.

One Canadian firm tapping into this approach is Toronto-based Solar Ship, which is building hybrid airships (part plane, part blimp) that are powered in part by the sun. Solar Ship is hoping to raise $1 million in donations to build one of its airships and send it on a mission to Africa, where it would deliver medical supplies to remote villages.

“2012 was the year that crowdfunding exploded onto the scene,” according to the website Crowdsourcing.org. “Sure, Kickstarter, Indiegogo, Rockethub and others were around before this year, but the last 12 months saw the very concept permeate much deeper into the collective consciousness.”

Momentum picked up in April after the Jump Star Our Business Start-Ups (JOBS) Act in the U.S. was signed into law. It amends securities laws to recognize “crowdfunding” as an avenue for raising capital. Early next year, the U.S. Securities and Exchange Commission is expected to lay out the formal rules of play.

One service taking advantage of this is Mosaic, a California-based start-up that’s starting to raise capital from the crowd to fund solar projects, with a promise of interest in return. Daniel Rosen, co-founder of Mosaic, said the big banks and brokerage houses simply aren’t set up to mobilize the masses for this kind of investment.

“Yet that is what so many people crave today. People want to see impact. They want to be connected to the power of their capital and see its force in the world,” Rosen wrote earlier this year in an online commentary.

Sensing that Ontario could be left behind, Brad Duguid, minister of economic development and innovation, said in November that the Ontario Securities Commission is currently studying the crowdfunding option and that the government is supportive of making the changes that will allow it to happen.

“If the provinces do not allow crowdfunding, will Canadian technology entrepreneurs be more inclined to locate their start-ups in the U.S.?” asked David Thring, a lawyer with law firm McMillan LLP, in a note to clients.

The risk is certainly there. And while the opportunity for crowdsourcing is exciting, it does raise a number of important questions, wrote Thring. “Who will emerge as the game-changer of Internet-based equity offerings and trading, in the same way that eBay emerged as a leader in resale of goods and Facebook emerged as a leader in social networks?

And, of course, what are the implications for the big banks, brokerage houses and venture capitalists?

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